Coca cola

Business
Ethics 2nd Assignment

Coca Cola Company

Contents
Introduction of Company
History of the company
Case study
Analysis
Ethical and Unethical practices
Problem found
Expansion strategy
Recommendation
Conclusion
References

Introduction
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In May 1886, John Pemberton, who was a pharmacist from Atlanta,

Georgia, was the first founder
of coca cola. He concocted
the coca cola formula in kin
three legged brass kettle
which the suggestion was
given by bookkeeper Frank
Robinson. Coke was first sold
at the pharmacy as a non
alcoholic version of French
wine coca. Is an American
multinational
beverage
corporation and manufacturer,
retailer and marketer of non-alcoholic beverage concentrates and syrups,
which is headquartered in Atlanta, Georgia. The company is best known
for its flagship product Cola. The Coca-Cola formula and brand was bought
in 1889 by As a Griggs Candler (December 30, 1851 - March 12, 1929),
who incorporated The Coca-Cola Company in 1892.
With production facilities in over 200 countries in the world
To put this in perspective, another American icon, McDonalds has
locations in only 119 countries2. As one of the worlds best-known brands,
coca- cola has capitalized on opportunities and Thrived. However, the
process has not been without some upheavals.
When Roberto Goizueta, its CEO for 17 years, passed away on October
18.1997, after a short bout with Lung cancer, the future looked uncertain.
During Goizueta, s tenure at coca- cola, the market value of the company
had dramatically increased from $4 billon to nearly $150 billon.
Coca-Colas Global Dominance The larger a company is, the harder it is to
continue to grow at a steady pace. This remains the major challenge
facing the Coca-Cola Company .The U.S market is already well developed,
with an average consumption per person of one serving per day of coke
products in both 2001 and 2002,The European and Eurasian market grew
slightly from 2001 to 2002 , with average consumption increasing from
one and a half to two serving per week. The Latin American, Asian and
African markets consumption levels were unchanged from 2001 to 2002
at four serving per week, two servings per month and three servings per
month, respectively4. Coca-cola produces more than 300 brands
worldwide in addition to its flagship brands, coke and diet coke.

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The History of the Coca-Cola Company

Coca cola originated as a soda fountain drink in 1886, began bottling on
1894, commended soda fountain in Canada and Mexico in 1897, and
initiated its first foreign bottling plant in panama in 1906.
Coke continued to expand internationally during the 1920s and 1903s and
even opened a foreign department in 1926.But its big international boost
came during world war 2.Recognizing that the war would bring a shortage
of sugar, one of cokes essential ingredients, its CEO announced on
national radio that the company would ensure that all U.S.
Military personal anywhere in the world could buy coca-cola at five cents a
bottle. His propaganda message worked. Not only did coca cola get all
the sugar it wanted even though U.S households seldom found sugar in
the grocery stores, it also got permission to build 64 bottling plants around
the world during the war.
When the war ended, coca-cola was known almost everywhere, and
returning services personal had become loyal customers. In 1957, coke
celebrated having bottling operations in 100 countries when it launched a
plant in the West African country of Sierra Leone. Former coke CEO Robert
Qoizueta said, We were global when global wasnt cool. Today, cokes
network of more than 1,000 plants serves customers in about 200
countries and operates a fleet of delivery trucks five times larger than that
of UPS.it has the largest share of the soft drink market, and more than
16,000 coca-cola beverages are consumed worldwide every second.

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Board of directors

John F. Brock
Chairman and Chief Executive Officer
Jan Bennink
Non-Executive Chairman, D.E. Master Blenders 1753
Calvin Darden
Former Senior Vice President, U.S. Operations
L. Phillip Human
Former Chairman of the Board
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Orrin H. Ingram II
President and Chief Executive Officer

Case Study: Coca-Cola India

Social activists have long levelled various accusations against Coca-Cola, such as human
rights abuses in Colombia, waste-disposal practices in India, and groundwater depletion in
India.26 This article examines in depth only one issue: groundwater use at one location,
Kaladera, in the state of Rajasthan in India. According to the Wall Street Journal, numerous
NGOs both inside and outside India accuse Coke, among other crimes, of sucking local
Indian communities dry through excessive pumping of groundwater.27 There were protests
against Coca-Cola in Plachimada, Kerala, starting in 2002. There has been a long running
legal dispute between the Kerala government and the company; the plant has been closed
since 2004. There were similar protests that Coca-Cola bottling plants deplete the
groundwater supply in Mehndiganj (Uttar Pradesh) and in Kaladera (Rajasthan). India
Resource Centre, a small NGO, has been a prominent critic of Coca-Cola India. Students
Organizing for Labour and Economic Equality at the University of Michigan picked up on
several accusations by social activists against Coca-Cola, and in 2004 formally requested the
University of Michigan to cease doing business with CocaCola.28 After a short suspension in
2006, the University resumed doing business with Coca-Cola, after the company agreed to
the Universitys demand for an independent assessment, which was performed by The Energy
and Resources Institute (TERI), a 13 prestigious Delhi-based, not-for-profit, policy research
organization. The TERI report was a particularly useful source for this article.29 the in-depth
case research in this article is based primarily on personal interviews. I visited Delhi and
Rajasthan for two weeks in 2011, and interviewed several Coca-Cola India executives both at
the country headquarters in Delhi and the bottling plant in Rajasthan, government officials at
both the federal and state levels, local farmers and village leaders in Kaladera, and NGOs
concerned about the water situation in India. All data and statements obtained from CocaCola India executives and used in this article were confirmed by the company in written
emails, which are available from the author. The Coca-Cola case was chosen precisely
because the company vociferously proclaims its social responsibility. Muhtar Kent, Chairman
and CEO, states, "We support the United Nations Global Compact, and see our sustainability
efforts first and foremost as the right thing to do -the continuation of responsible corporate
citizenship that began in our earliest days as a company."30 It should be noted that Muhtar
Kent does not make a business case for CSR, and instead defines CSR along the lines of this
article. Coca-Cola India's website claims that "The Coca-Cola Company has always placed
high value on good citizenship. ... Coca-Cola India provides extensive support for community
programs across the country, with a focus on education, health and water conservation."31
Several Coca-Cola India executives I met had business cards with some CSR slogan printed
on the reverse side; here is one example: Live positively is our commitment to 14 making a
positive difference in the world so that sustainability is part of everything we do forever.
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Given the nature of the company's products, it has appropriately focused its sustainability
efforts on water resources. Muhtar Kent states, "At The Coca-Cola Company, we are
transforming the way we think and act about water stewardship. It is in the long-term interest
of both our business and the communities where we operate to be good stewards of our most
critical shared resource, water."32 The company claims that water stewardship "is now
clearly embedded in both our business strategy and our vision for sustainable business
growth."

Analysis of the case

Coca-Cola has had seven months to respond to the findings on Kala
Dera.we have not seen much action on the part of Coca-Cola that address
the concerns raised in the assessment. In fact, what we have seen much
of, is an unethical and dishonest campaign by the Coca-Cola Company in
an attempt to misrepresent the issues.
Continued Misery in the Face of Certainty
Kala Dera lies in an overexploited groundwater area and access to
water has been difficult. Summers are particularly intense in the
area, and summers are when water shortages are most acute.
Criminal Negligence or Straight Incompetence
Prior to locating a bottling plant in Kala Dera, Coca-Cola is supposed
to have conducted an Environmental Impact Assessment that looks
at a variety of current conditions and potential impacts if the plant is
built and operated.
The Coca-Cola company has refused to share the environmental
impact assessment it conducted for Kala Dera (or any other plants in
India), citing "legal and strategic confidentiality" reasons.
Misrepresenting Facts
In reaching out to the media and the public regarding the scathing
TERI assessment, the Coca-Cola Company has misrepresented the
facts on several occasions.
Coca-Cola Forced to Agree to Assessment
The Coca-Cola Company says that it "voluntarily participated" in the
assessment even though the University of Michigan insisted that
Coca-Cola agree to an assessment if it wanted to do business with
the University of Michigan.
The company goes on further to state that "our voluntary
participation in the TERI assessment reflects our commitment to
transparency and continuous improvement."
If Coca-Cola were committed to transparency, we would suggest they
make a good start by sharing the Environmental Impact Assessment
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that they conducted for Kala Dera and rest of the bottling plants in
India.
Coca-Cola Fails to Mention Shut down Plant Recommendation
In its letter to the University of Michigan after the assessment, the
company fails to mention the fourth recommendation made by the
assessment - to shut down the bottling plant.
Coca-Cola Does Not Meet its Own Standards
In the same letter, the company states that their plants "on an
overall basis are meeting our own more stringent internal standards."
One of the shocking findings of the assessment was that of the six
plants surveyed, in not one did the plant meet the Coca-Cola
company standards for waste management, known as the TCCC
standards! What is the point of having Coca-Cola company standards
if not a single plant meets them?
Coca-Cola Not in Compliance with Government Regulations
In the same letter, the company states that "its bottlers are in
compliance with the standards of relevant India government and
regulatory agencies."
Again, the assessment found that the treated effluent discharge at
none of the six plants surveyed met all the standards of the relevant
Indian government and regulatory agencies. The assessment states
that the treated effluent discharge at the plants "mostly met the
effluent discharge requirements".
Corporate Social Responsibility
Corporate responsibility is managed through the Public Policy and
Corporate Reputation Council, a cross-functional group of senior
managers from our Company and bottling partners. The Council
identifies risks and opportunities faced by our business and
communities and recommends strategies to address these
challenges.
While there have been no genuine initiatives on the part of CocaCola to correct its mistakes in Kala Dera, the Coca-Cola company has
stepped up its corporate social responsibility spending to announce
to the world that it is a green and socially responsible company. Such
an effort, however, rings hollow when it comes to India
The core of the ethics and compliance program at The CocaCola Company is our Code of Business Conduct. The Code guides our
business conduct, requiring honesty and integrity in all matters. All
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of our associates and directors are required to read and understand

the Code and follow its precepts in the workplace and larger
community.

Unethical practices of coca cola

Coca-Cola Company has been sued by many different people and for
several different reasons Coca-cola. In the early 20th Century, was
prosecuted for the unethical and illegal actions of combining drugs with
their product to create an addicting force between the product and the
consumers. Coca-Cola Companys idea of creating customer loyalty was
aimed more at addicting the customer to the product over developing a
relationship between the customer and the company. The unethical
behaviour of the company was not to cross the line with serious legal
issues of this calibre and moved onto substituting caffeine for cocaine. In
October 2006, Coca-Cola Company was sued for an insufficient label. The
lawsuit claimed that since the label was insufficient, the labels were
misleading the consumers. This can be easily classified as unethical
behaviour by the company and can be seen as morally wrong. The
company is essentially trying to profit from the misconception and
misguidance of the marketing for the product. During late July 2001,
Coca-Cola was threatened by a major lawsuit that involved the company
violating human rights that caused five hundred employees at Coca-Cola
plants in Columbia harm or death.

Kala Dera is Thirsting from Coca-Cola. Kala Dera large village outside
the city of Jaipur where agriculture is the primary source of
livelihood. Coca-Cola started its bottling operations in Kala Dera in
2000, and within a year, the community started to notice a rapid
decline in groundwater levels.
For
farmers,
loss
of
groundwater translated directly
into loss of income. For
women, it meant having to
walk additional 5 to 6 kilometres just to fetch water to meet the basic
daily needs of the family.
Forced Assessment Validates Community Concerns
The community of Kala Dera are opposing Coca-Cola bottling plants,
but they have enjoyed significant international support. And most
notable in lending support have been college and university students
across the globe, and in particular, the US, UK and Canada - some of
Coca-Cola's larger markets.
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Stop Using Groundwater in Kala Dera

Confirming that Coca-Cola's bottling plant in Kala Dera operated in
an "overexploited" groundwater area and the Coca-Cola's bottling
plant had "significant impacts", the assessment noted that "the
plant's operations in this area would continue to be one of the
contributors to a worsening water situation and a source of stress to
the communities around.

Collaboration as expansion strategy

Because of changes in the market, coca-cola has been expanding its
product offering in three ways:

Developing new products

Acquiring companies that have complementary products
Gaining licenses to use brand names of other companies
Coke has been doing some of this broadening of its own and some in
partnership with other companies. Weve already discussed some of
cokes internal development of new products, such as coca-cola zero
and cherry coke. In addition, the company has been gone so far as
to test market in Singapore, Toronto, and Oslo the opening of its
own coffee shops. Its acquisitions have been widespread, including
juice companies in Brazil and Russia and specialty water companies
in Germany and the United states.
It has a joint venture with nestle for tea products outside the United
States and a joint venture with Cargill to develop a new sweetener
to put into drinks. It is spending heavily on licensing ($901 million in
2006) for the production and sale of products using different
trademarks. One of the most important license agreements is with
Danone for various water brands including sparkletts.

Franchises: bottlers
Coca-Cola sees its bottlers worldwide as the backbone of the company.
These bottlers operate under franchise agreements in which each has
exclusive rights to sell within a given territory. They not only bottle coke
beverages, but they also deliver them to such outlets as grocery stores
and vending machines. They put up ad displays in stores and even make
sure bottles are aligned correctly on supermarket shelves. In short, they
know and respond well to their local markets. By turning activities over to

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the franchised bottlers, coca -cola can concentrate its efforts on what it
feels it can do best. And these efforts help the profitability of bottles.

Consumer relations
Throughout 2012, Coca-Cola contributed $1,700,500 to a $46 million
political campaign known as "The Coalition against the Costly Food
Labelling Proposition, sponsored by Farmers and Food Producers. This
organization was set up to oppose a citizen's initiative, known as
Proposition 37, demanding mandatory labelling of foods containing
genetically modified ingredients.

Problems found
The Coca Cola Company at Plachimada has been causing
environmental degradation by over extraction of ground water and
irresponsible disposal of the sludge.
The water resources of the area have been affected and the water
scarcity has been compounded.
By passing off the sludge as manure, the Company has not only
misguided the farmers but has become responsible for the soil
degradation, water contamination and consequential loss of
agriculture.
There has been a steady decline in the agriculture production in the
area.
The production of milk, meat and eggs also has suffered.
Metals like cadmium, lead and chromium have been detected in the
sludge and this has affected the health of the people.
The general health of the people has been affected with skin
ailments, breathing problems and other debilities.
Low birth weight of children has also been noticed.
Environment of the Village has acutely been damaged by polluting
water and soil.
However it is desirable to set up a dedicated institution to
adjudicate the individual claims. Such a dedicated mechanism
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could either be a Tribunal under Art. 323 B of the Constitution of

India to be legislated by the state legislature or an Authority under
section 3(3) of the Environment (Protection) Act, 1986 to be created
by the Central Government.

Recommendation
Use alternative resources that do not harm the environment
Must give more importance to CSR
Consider the people also, not only the profit of company
Conclusion:
The coca cola company is currently one of the biggest and most
recognized soft beverage brands in the world.
With over 3000 products and more than 200 countries, the coca,
Cola Company has surely part of peoples lives.
The coca cola company owes its success to the people who do their
best to achieve the task in hand .thus, the coca- cola company takes
cares of its
employees to return a creating a good working
environment and working along with union and government and
agencies to make sure its employees are safe.
Coca Cola has spent over $2 million just on advertising and
marketing. This makes Coca-Cola well known in many countries In
addition, keeping up with today's new trends, the Coca-Cola
Company also advertise its products on MySpace, face book and
twitter.
The Coca-Cola Company has been able to the set the entry barrier in
the beverage business very high, new companies are discouraged to
compete with Coca-Cola. It is almost impossible for new comers to
keep up with Coca-Cola and similar competitors with recognized
names in the business such as Pepsi.
The Coca-Cola success isn't something that has been achieved over
night. Many years has passed since John Pemberton created the
secret formula for Coca-Cola in 1886.
It is almost impossible for new comers to keep up with Coca-Cola
and similar competitors with recognized names in the business such
as Pepsi.
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. It is almost impossible for new comers to keep up with Coca-Cola

and similar competitors with recognized names in the business such
as Pepsi. The Coca-Cola success isn't something that has been
achieved over night. Many years has passed since John Pemberton
created the secret formula for Coca-Cola in 1886.

References
1.

https://www.google.co.in/search?
q=coca+cola+unethical+behavior&oq=unethical+practices+in+co
ca+cola+company&gs_l=serp.1.1.0i71l4.0.0.0.269914.0.0.0.0.0.0.0
.0..0.0. Msedr...0...1c...64. Serp...0.0.0.tyK8y55dp9Q

2.

http://coca-cola081.blogspot.in/2010/09/unethical-behaviorcoca-cola-week-4.html

3.

Jump up to:a http://media.corporateir.net/media_files/irol/11/117435/CCE_2011AR_FINAL_LR.pdf

4.

Jump up^ "Schweppes Drinks: Ingredients and Nutritional

Information - Coca-Cola GB". Coca-cola.co.uk. 2010-04-13.
Retrieved 2013-10-26.

5.

Jump up^ A $417.5 MILLION OFFER BY COCA-COLA FOR

BOTTLER

6.

Jump up^ Coca-Cola to Pay 1 Billion for Bottling Plants in US

and Canada

7.

Jump up^ Financial Times "Coca-Cola has tended to keep its

bottlers at arms length"

8.

Jump up^ Coca-Cola Enterprises homepage "The World's

Largest Bottler"

9.

Jump up^ Coca-Cola Enterprises Launches Largest Hybrid

Electric Delivery Trucks in North America

10.
Jump up^ Coca-Cola Orders 120 New Hybrid Trucks; Eatons
Largest NA Commercial Order to Date
11.Jump up^ "The Coca-Cola Brands". Coca-colacompany.com. Retrieved December
19, 2012.

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